Funding, management key to success

THE recently-conceived Public Private Partnerships (PPP) policy looks promising, however, it must be funded adequately and managed properly by the Government to guarantee its continuity and ensure it attains the desired results.
Proper funding and management are crucial because despite a backdrop of sturdy economic growth in recent times, service delivery to the rural areas in particular is dismal or non-existent.
Another concern is the participation, or lack of it, of Papua New Guinean-owned firms.
Philip Kikala, Vice-Minister for National Planning and District Development, put it plainly when he said “critical infrastructure remains in poor condition and critical services do not reach the majority of our people”.
The PPP was initiated by the Government as one of the preferred procurement models.
Essentially, it is a model of providing public infrastructure services by a private firm through contractual arrangements between the Government and the private sector.
Approved last December by the National Executive Council, it is envisaged that the PPP policy will ease the Government’s understanding of “whole life cost” of investments and enable more rigorous service delivery and improved economic and social infrastructure
During consultative talks currently being held in Port Moresby and in Lae recently, the Department of National Planning is giving the private sector and key stakeholders the opportunity to peruse and critically analyse the policy.
From the feedback received, the three issues that stand out are proper funding, management and the involvement of Papua New Guinean-owned firms.
Paul Barker, of the Institute of National Affairs, says it is critical that the Government ensures that funds held in trust accounts are released steadily, for genuine priorities, with help from development partners to improve implementation.
“This includes the use of Public Private Partnerships,” he said.
Mr Barker said public administration was more effective in the past but allowed to break down as funds had been drained from provinces and core infrastructure maintenance and diverted elsewhere. 
He said the Government must entail the effective use of public funds and free up opportunities for private capital to develop the economy.
He urged for strong coordination between macro-economic policy, including monetary policy, and micro-economic management and partnership between government, at all levels and the private sector.
The bottom line is funding must be realised and an effective PPP centre, as planned, must be achieved prior to pursuing partnerships with the private sector.
Chey Scovell, CEO of the Manufacturers Council of PNG, said it “is critical to ensuring that potential PPPs are well managed – especially given the inherent risks”.
The reason being that a badly managed PPP will be no different to normal procurement – “in fact it will likely be worse given the much larger commitment that is generally being made,” he said.
Given the enormity of PPPs and the binding commitment they will make to current and future generations of Papua New Guineans, concerns raised include the comment that “goodwill and intention is not a sufficient guarantee for the protection of our people”.
Note that, at present, PNG has not demonstrated its capacity to successfully manage procurement.
Prominent lawyer Peter Donigi raised concern that the PPP denies Papua New Guinean firms the opportunity to compete for contracts and is exclusively foreigner-friendly.
The Government, he argued, must review the policy to create equal opportunities for nationally-owned firms to compete for contracts and not just foreign firms.
His argument is that the PPP has worked well in countries with large domestic firms that can compete in the marketplace for contracts but may not necessarily be suited to PNG.
It is a concern that must be looked into as Papua New Guineans must not be sidelined and remain spectators. We must be involved in our nation’s development.
The Government through the Department of National Planning must take into account all the concerns raised seriously and ensure that no stone is left unturned prior to executing the partnerships with the private sector.
Rural folks do not want to remain neglected for another 30 years.